Correlation Between Micron Technology and Autohellas

Can any of the company-specific risk be diversified away by investing in both Micron Technology and Autohellas at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Micron Technology and Autohellas into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Micron Technology and Autohellas SA, you can compare the effects of market volatilities on Micron Technology and Autohellas and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Micron Technology with a short position of Autohellas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Micron Technology and Autohellas.

Diversification Opportunities for Micron Technology and Autohellas

0.32

Correlation Coefficient

Micron Technology  Autohellas

Weak diversification

The 3 months correlation between Micron and Autohellas is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Micron Technology and Autohellas SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Autohellas SA and Micron Technology is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Micron Technology are associated (or correlated) with Autohellas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Autohellas SA has no effect on the direction of Micron Technology i.e., Micron Technology and Autohellas go up and down completely randomly.

Pair Corralation between Micron Technology and Autohellas

Allowing for the 90-day total investment horizon Micron Technology is expected to generate 2.04 times less return on investment than Autohellas. In addition to that, Micron Technology is 2.8 times more volatile than Autohellas SA. It trades about 0.05 of its total potential returns per unit of risk. Autohellas SA is currently generating about 0.27 per unit of volatility. If you would invest  1,016  in Autohellas SA on December 28, 2024 and sell it today you would earn a total of  258.00  from holding Autohellas SA or generate 25.39% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Micron Technology  vs.  Autohellas SA

Micron Technology

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Micron Technology are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Micron Technology may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Autohellas SA

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Autohellas SA are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain basic indicators, Autohellas sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Micron Technology and Autohellas

The main advantage of trading using opposite Micron Technology and Autohellas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Micron Technology position performs unexpectedly, Autohellas can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Autohellas will offset losses from the drop in Autohellas' long position.

The idea behind Micron Technology and Autohellas SA pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.